Motor insurer Admiral's (ADM) shares fell over 3 per cent on the day these half-year figures appeared, after revealing that earnings growth at its core UK motor unit had been significantly supported by reserve releases. The small international operation's losses widened, too, and the confused.com price comparison website saw profit fall 60 per cent, partly reflecting competitive conditions.
Still, chief executive Henry Engelhardt did reveal some positive news on pricing. Specifically, he said there were "some signs that premiums are no longer falling", although he admitted that there's still "no firm evidence of an inflexion point" in rates, either. Admiral's premium rates were actually flat in the half, which was rather better than the market's experience more generally. Indeed, the confused.com/Towers Watson price index reported that UK motor rates for the market overall slumped 15 per cent in the second quarter.
Meanwhile, the investment book remains focused on high-quality bonds and cash. Unsurprisingly, then, the investment return in the half reached a mere 0.6 per cent.
Prior to these figures, JPMorgan Cazenove was expecting adjusted EPS of 102p (from 104p in 2013).
ADMIRAL (ADM) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,403p | MARKET VALUE: | £3.88bn | |
| TOUCH: | 1,402-1,404p | 12-MONTH HIGH: | 1,583p | LOW: 1,151p |
| DIVIDEND YIELD†: | 3.4% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 194p | COMBINED RATIO: | 95.3% | |
| Half-year to 30 Jun | Net premiums (£m) | Pretax profit (£m) | Investment income (£m) | Dividend per share (p)† |
|---|---|---|---|---|
| 2013 | 241 | 181 | 6.7 | 22.5 |
| 2014 | 232 | 183 | 6.7 | 23.7 |
| % change | -4 | +1 | - | +5 |
Ex-div: 10 Sep Payment: 10 Oct †Excludes special dividends: 52.6p in 2013 and 25.7p in 2014's second half | ||||
